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HomeMy WebLinkAboutRes OB-057 (2)OVERSIGHT BOARD TO SUCCESSOR AGENCY OF THE PALM DESERT REDEVELOPMENT AGENCY STAFF REPORT REQUEST: APPROVE RESOLUTION NO. O1"57 - A RESOLUTION APPROVING THE EXECUTION OF A CARLOS ORTEGA VILLAS PROJECT BOND PROCEEDS FUNDING AGREEMENT BETWEEN THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY AND THE PALM DESERT HOUSING AUTHORITY AND TAKING CERTAIN RELATED ACTIONS SUBMITTED BY: Martin Alvarez, Director of Economic Development DATE: October 7, 2013 r,/ (BYO'VERSIGHT BOARD ON CONTENTS: Resolution No. OB - 057 Reimbursement Agreement- VERIFIED BY Original on file with City Clerk's Office Recommendation By Minute Motion that the Oversight Board: OB-05 7 1. Waive further reading and adopt Resolution No. approving the execution of a Carlos Ortega Villas Project Bond Proceeds Funding Agreement between the Successor Agency to the Palm Desert Redevelopment Agency and the Palm Desert Housing Authority and taking certain related action. Backaround On April 8, 2010, the Palm Desert Redevelopment Agency Board ("Agency Board") authorized the Executive Director to negotiate and finalize a Professional Services Agreement with Interactive Design Corporation (IDC) for architectural services for the Carlos Ortega Villas. Since 2011, staff's ability to move this project forward has been limited by the dissolution of the Redevelopment Agency. The project entitlement process was completed and the project design approved by the Successor Agency/Housing Authority on March 22, 2012. Interactive Design is nearing completion of the construction documents and anticipates submitting for plan check by December 2013. Pursuant to dissolution law, only existing contracts have been eligible for payment from ROPS, until a Finding of Completion is received by the Successor Agency. The DOF G.\RDA\Veronica Tapia\Word Files\Staff Reports\Oversight Board\Staff Reports\OB SR -Carlos Ortega Villas Reimbursement Agreement 9-19-13.doc Staff Report Carlos Ortega Villas Reimbursement Agreement Page 2 of 3 October 7, 2013 RES. NO. OB — 057 issued our Finding of Completion on May 15, 2013, which provides the ability for the Successor Agency to utilize existing bond funds for the purpose in which they were issued; however in order to spend these funds, the project must be included on an approved ROPS. Therefore estimated construction cost for this existing obligation (Carlos Ortega Villas) has been included for approval on ROPS 13-14B. The earliest the funds may be available for use is January 2014. If the project is not submitted for plan check by December 2013, new codes will have to be incorporated into the completed design, which will cost additional time and money which is not budgeted into the existing obligation. Consequently, the Housing Authority will expend these immediate costs up front and be reimbursed from bond funds, upon approval of the ROPS by the DOF. The authorization will allow payment of all related expenditures including all fees associated with moving the project through the permitting process. The agency, description, and estimated costs for the immediate anticipated fees are summarized below: Agency Description Estimated Cost City - Bldg & Safety and Fire Plan Check $ 192,121 City - Public Works Plan Check $ 39,727 CVWD Sewer, Water and Landscape Plan Checks $ 2,500 SCE (2) Quitclaim Easements $ 1,000 The Gas Company Quitclaim Easement $ 1,000 Stewart Title Title Document Preparation $ 1,000 Contingency $ 23,735 Total Estimated Fees $ 261,083 Staff has reviewed the Agreement with SARDA legal counsel and staff recommends approval of the estimated expenditures. Staff anticipates commencement of bidding for construction of the project in the first part of 2014, pending approval of the use of bond funds for this purpose. Staff recommends approval of the Carlos Ortega Villas Project Bond Proceeds Funding Agreement between the Successor Agency and Housing Authority and taking certain related actions. Fiscal Analysis The estimated cost for the project ($16,665,218) is listed on ROPS, lines 171 and 186. Although the Housing Authority would initially advance the funds for this work, it is the intention of the Successor Agency to reimburse the Housing Authority for the costs from G \RDA\Veronica Tapia\Word Files\Staff Reports\Oversight Board\Staff Reports\OB SR -Carlos Ortega Villas Reimbursement Agreement 9-19-13 doc Staff Report Carlos Ortega Villas Reimbursement Agreement Page 3 of 3 October 7, 2013 RES. NO. OB-057 bond proceeds which include a project for the Carlos Ortega Villas improvements in the bond covenant. Only in the event there are no funding sources available from the Successor Agency would the Housing Authority have to pay for the work. Upon approval of ROPS 13-14B, reimbursement will occur after January 1, 2014. Prepared By: artin Alvarez Director of Economic Development maul S. Gibson Director of Finance Approval: 4.0,0-,,s hn M. Wohlmuth ity Manager/Executive Director of the uccessor Agency of the Palm Desert edevelopment Agency la s( Moore Director of Housing G \RDA\Veronica Tapia\Word Files\Staff Reports\Oversight Board\Staff Reports\OB SR -Carlos Ortega Villas Reimbursement Agreement 9-19-13 doc RESOLUTION NO. OB- 057 A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY APPROVING THE EXECUTION OF AN CARLOS ORTEGA VILLA PROJECT BOND PROCEEDS FUNDING AGREEMENT BETWEEN THE SUCCESSOR AGENCY AND THE CITY OF PALM DESERT RECITALS: A. Pursuant to AB X1 26 (which became effective at the end of June 2011) and the California Supreme Court's decision in Califomia Redevelopment Association, et al. v. Ana Matosantos, et al., 53 Ca1.4th 231(2011), the former. Palm Desert Redevelopment Agency (the "Former RDA") was dissolved as of February 1, 2012, and the Successor Agency to the Palm Desert Redevelopment Agency (the "Successor Agency") was constituted. B. Pursuant to Section 34175(b) of the California Health and Safety Code ("HSC"), assets of the Former RDA, including all unspent bond proceeds, transferred to the control of the Successor Agency by operation of law. C. Pursuant to HSC Section 34176(b), the City Council of the City of Palm Desert (the "City") adopted Resolution No. 2012-07, electing for the City not to retain the responsibility for performing housing functions previously performed by the Former RDA, and determining that all of the assets, as allowed by law, and all rights, powers, liabilities, duties, and obligations associated with the housing activities of the Former RDA be transferred to the Palm Desert Housing Authority (the Housing Authority, acting in such capacity, being also referred to in this Agreement as the "Housing Successor"). D. The Carlos Ortega Villas is a proposed 72-unit affordable senior housing complex to be owned and operated by the Housing Authority. E. A project to construct and install certain infrastructure and improvements for the Carlos Ortega Villas (the "Carlos Ortega Villas Project") has been under development. F. The Palm Desert Financing Authority (the "Financing Authority") previously issued its Tax Allocation Revenue Bonds (Project Area No. 4), Series 2001, in the principal amount of $15,695,000 (the "2001 Bonds"), pursuant to an Indenture of Trust, dated as of November 1, 2001, by and between the Financing Authority and Well Fargo Bank, National Association (as successor to BNY Western Trust Company), as trustee (the "2001 Bond Trustee"). G. Pursuant to the Loan Agreement, dated as of November 1, 2001 (the "Loan Agreement"), by and among the Financing Authority, the Former RDA, and the 2001 Bond Trustee, proceeds of the 2001 Bonds were lent to the Former RDA as a loan (the "2001 Loan"). G:\rda\Veronica Tapia\Word Files\Staff Reports\Oversight Board\Staff Reports\Palm Desert - OB reso re Carlos Ortega Villas Project Bond Proceeds Funding Agree 9-20-13.DOCX RESOLUTION NO. OB - 057 H. The Former RDA caused a portion of the proceeds of the 2001 Bonds received as part of the 2001 Loan to be deposited into a Project Fund (the "2001 Project Fund"), which was established, and is held, by the 2001 Bond Trustee pursuant to the 2001 Loan Agreement. I. There remains a balance in the 2001 Project Fund (the "2001 Bond Proceeds"), in the amount of $4,670,523 as of September 20, 2013. J. According to HSC Section 34191.4, after the receipt by the Successor Agency of a finding of completion (the "Finding of Completion") issued by the California State Department of Finance (the "DOF") pursuant to HSC Section 34179.7, the 2001 Bond Proceeds shall be used for the purposes for which the 2001 Bonds were sold, in a manner consistent with the original bond covenants. K. By DOF's letter, dated May 15, 2013, the DOF informed the Successor Agency that the DOF has issued a Finding of Completion to the Successor Agency. L. As documented by the Official Statement, dated November 15, 2001, it was intended, at the issuance of the 2001 Bonds, that proceeds of the 2001 Bonds be used to finance the construction and installation of public improvements (including right of way improvements, street improvements, sidewalk and landscape improvements, drainage improvements, underground of utilities, freeway interchange improvements, land acquisition), and the Carlos Ortega Villas Project includes the construction and installation of such public improvements. M. The Successor Agency desires to use the 2001 Bond Proceeds for the completion of the Carlos Ortega Villas Project. N. The Financing Authority also previously issued its Tax Allocation Revenue Bonds (Housing Set Aside Refunding Revenue Bonds), Series 2007, in the principal amount of $86,155,000 (the "2007 Housing Bonds"), pursuant to an Indenture of Trust, dated as of February 1, 2007, by and between the Financing Authority and Wells Fargo Bank, National Association, as trustee (the "2007 Bond Trustee"), for the purpose of financing projects for low and moderate income housing purposes. O. Pursuant to the Loan Agreement, dated as of February 1, 2007 (the "2007 Loan Agreement"), by and among the Financing Authority, the Former RDA, and the 2007 Bond Trustee, proceeds of the 2007 Housing Bonds were lent to the Former RDA as a loan (the "2007 Loan"). P. The Former RDA caused a portion of the proceeds of the 2007 Housing Bonds received as part of the Loan to be deposited into a Project Fund (the "2007 Project Fund"), which was established, and is held, by the 2007 Bond Trustee pursuant to the 2007 Loan Agreement. 12812-000 I \ 16323 1 7. I RESOLUTION NO.oB - 057 Q. There remains a balance in the 2007 Project Fund (the "2007 Housing Bond Proceeds"), in the amount of $23,161,431 as of September 20, 2013. R. HSC Section 34176(g) provides that the Housing Authority, as the Housing Successor, may designate the use of, and commit, the 2007 Housing Bond Proceeds; provided that such use and commitment of 2007 Housing Bond Proceeds are consistent with the bond covenants. S. As documented by the Certificate Regarding Compliance with Certain Tax Matters, dated as of February 7, 2007 (the "2007 Tax Certificate"), it was intended, at the issuance of the 2007 Bonds, that moneys deposited in the 2007 Project Fund be used for, among other projects, various components of the Carlos Ortega Villas Project (the Carlos Ortega Villas being then called the Country Village). T. The Housing Authority desires to use the 2007 Housing Bond Proceeds to supplement the 2001 Bond Proceeds for the completion of the Carlos Ortega Villas Project. U. Pursuant to HSC Section 34177(1), the Successor Agency must prepare a Recognized Obligation Payment Schedule ("ROPS") for each six-month fiscal period ("ROPS Period"). The ROPS must be submitted to the Oversight Board of the Successor Agency (the "Oversight Board") and the State Department of Finance (the "DOF") for approval. V. Pursuant to HSC Section 34191.4(c)(2), the expenditure of 2001 Bond Proceeds for an obligation must be listed on a ROPS. W. Pursuant to HSC Section 34176(g), a designation of the use and commitment of the 2007 Housing Bond Proceeds must be listed on a ROPS. X. The Successor Agency has prepared and submitted to the Oversight Board and the DOF, a ROPS ("ROPS 13-14B") for the six-month fiscal period commencing January 1, 2014 (the "ROPS 13-14B Period"). The Carlos Ortega Villas Project is listed on ROPS 13-14B as Line Item No. 171 (being the portion expected to be funded from the 2001 Bond Proceeds) and Line Item No. 186 (being the portion expected to be funded from the 2007 Bond Proceeds). Y. As between the Successor Agency and the Housing Authority, the Housing Authority has better capacity (with respect to staffing and established procedures) to perform or cause to be performed, the work required to complete the Carlos Ortega Villas Project. Z. The Successor Agency and the Housing Authority desire to enter into the Carlos Ortega Villas Project Bond Proceeds Funding Agreement, substantially in the form attached hereto as Exhibit A, to provide that the Housing Authority will perform or cause to be performed all work required to complete the Carlos Ortega Villas Project, 12812-0001\1632317.1 RESOLUTION NO. OB - 057 with payment therefor to be made from the 2001 Bond Proceeds and 2007 Bond Proceeds. NOW, THEREFORE, THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. Recitals. The above recitals, and each of them, are true and correct. Section 2. Carlos Ortega Villas Proiect Bond Proceeds Funding Agreement. This Oversight Board hereby approves the Successor Agency's execution and delivery of the Carlos Ortega Villas Project Bond Proceeds Funding Agreement, substantially in the form attached hereto as Exhibit A. Section 3. Other Acts. The members of this Oversight Board. and the staff of the Successor Agency are hereby authorized, jointly and severally, to do all things which they may deem necessary or proper to effectuate the purposes of this Resolution and the Carlos Ortega Villas Project Bond Proceeds Funding Agreement. Section 4. Effective Date. This Resolution shall become effective in accordance with HSC Section 34181(f). APPROVED and ADOPTED this day of , 2013. AYES: NOES: ABSENT: ABSTAIN: ROBERT A. SPIEGEL, CHAIR ATTEST: RACHELLE D. KLASSEN, SECRETARY OVERSIGHT BOARD FOR THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY 12812-0001 \ 1632317.1 RES. NO. OB - 057 EXHIBIT A Carlos Ortega Villas Project Bond Proceeds Funding Agreement (in substantial final form) (see attached) 12812-0001 \ 1632445.1 RES. NO. OB - 057 CARLOS ORTEGA VILLAS PROJECT BOND PROCEEDS FUNDING AGREEMENT This CARLOS ORTEGA VILLAS POJECT BOND PROCEEDS FUNDING AGREEMENT (this "Agreement"), dated as of October 10, 2013, is entered into by and between the Palm Desert Housing Authority (the "Housing Authority") and the Successor Agency to the Palm Desert Redevelopment Agency (the "Successor Agency," and together with the Authority, the "Parties"). RECITALS: A. Pursuant to AB X 1 26 (which became effective at the end of June 2011) and the California Supreme Court's decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., 53 Ca1.4th 231(2011), the former Palm Desert Redevelopment Agency (the "Former RDA") was dissolved as of February 1, 2012, and the Successor Agency was constituted. B. Pursuant to Section 34175(b) of the California Health and Safety Code ("HSC"), assets of the Former RDA, including all unspent bond proceeds, transferred to the control of the Successor Agency by operation of law. C. Pursuant to HSC Section 34176(b), the City Council of the City of Palm Desert (the "City") adopted Resolution No. 2012-07, electing for the City not to retain the responsibility for performing housing functions previously performed by the Former RDA, and determining that all of the assets, as allowed by law, and all rights, powers, liabilities, duties, and obligations associated with the housing activities of the Former RDA be transferred to the Housing Authority (the Housing Authority, acting in such capacity, being also referred to in this Agreement as the "Housing Successor"). D. The Carlos Ortega Villas is a proposed 72-unit affordable senior housing complex to be owned and operated by the Housing Authority. E. A project to construct and install certain infrastructure and improvements for the Carlos Ortega Villas (the "Carlos Ortega Villas Project") has been under development. F. The Palm Desert Financing Authority (the "Financing Authority") previously issued its Tax Allocation Revenue Bonds (Project Area No. 4), Series 2001, in the principal amount of $15,695,000 (the "2001 Bonds"), pursuant to an Indenture of Trust, dated as of November 1, 2001, by and between the Financing Authority and Well Fargo Bank, National Association (as successor to BNY Western Trust Company), as trustee (the "2001 Bond Trustee"). G. Pursuant to the Loan Agreement, dated as of November 1, 2001 (the "Loan Agreement"), by and among the Financing Authority, the Former RDA, and the 2001 Bond Trustee, proceeds of the 2001 Bonds were lent to the Former RDA as a loan (the "2001 Loan"). -1- 12812.0001\I632318.1 RES. NO. OB - 057 H. The Former RDA caused a portion of the proceeds of the 2001 Bonds received as part of the 2001 Loan to be deposited into a Project Fund (the "2001 Project Fund"), which was established, and is held, by the 2001 Bond Trustee pursuant to the 2001 Loan Agreement. I. There remains a balance in the 2001 Project Fund (the "2001 Bond Proceeds"), in the amount of $4,670,523 as of September 20, 2013. J. According to HSC Section 34191.4, after the receipt by the Successor Agency of a finding of completion (the "Finding of Completion") issued by the California State Department of Finance (the "DOF") pursuant to HSC Section 34179.7, the 2001 Bond Proceeds shall be used for the purposes for which the 2001 Bonds were sold, in a manner consistent with the original bond covenants. K. By DOF's letter, dated May 15, 2013, the DOF informed the Successor Agency that the DOF has issued a Finding of Completion to the Successor Agency. L. As documented by the Official Statement, dated November 15, 2001, it was intended, at the issuance of the 2001 Bonds, that proceeds of the 2001 Bonds be used to finance the construction and installation of public improvements (including right of way improvements, street improvements, sidewalk and landscape improvements, drainage improvements, underground of utilities, freeway interchange improvements, land acquisition), and the Carlos Ortega Villas Project includes the construction and installation of such public improvements. M. The Successor Agency desires to use the 2001 Bond Proceeds for the completion of the Carlos Ortega Villas Project. N. The Financing Authority also previously issued its Tax Allocation Revenue Bonds (Housing Set Aside Refunding Revenue Bonds), Series 2007, in the principal amount of $86,155,000 (the "2007 Housing Bonds"), pursuant to an Indenture of Trust, dated as of February 1, 2007, by and between the Financing Authority and Wells Fargo Bank, National Association, as trustee (the "2007 Bond Trustee"), for the purpose of financing projects for low and moderate income housing purposes. O. Pursuant to the Loan Agreement, dated as of February 1, 2007 (the "2007 Loan Agreement"), by and among the Financing Authority, the Former RDA, and the 2007 Bond Trustee, proceeds of the 2007 Housing Bonds were lent to the Former RDA as a loan (the "2007 Loan"). P. The Former RDA caused a portion of the proceeds of the 2007 Housing Bonds received as part of the Loan to be deposited into a Project Fund (the "2007 Project Fund"), which was established, and is held, by the 2007 Bond Trustee pursuant to the 2007 Loan Agreement. Q. There remains a balance in the 2007 Project Fund (the "2007 Housing Bond Proceeds"), in the amount of $23,161,431 as of September 20, 2013. R. HSC Section 34176(g) provides that the Housing Authority, as the Housing Successor, may designate the use of, and commit, the 2007 Housing Bond Proceeds; provided -2- 12812.0001\1632318 1 RES. NO. OB - 057 that such use and commitment of 2007 Housing Bond Proceeds are consistent with the bond covenants. S. As documented by the Certificate Regarding Compliance with Certain Tax Matters, dated as of February 7, 2007 (the "2007 Tax Certificate"), it was intended, at the issuance of the 2007 Bonds, that moneys deposited in the 2007 Project Fund be used for, among other projects, various components of the Carlos Ortega Villas Project (the Carlos Ortega Villas being then called the Country Village). T. The Housing Authority desires to use the 2007 Housing Bond Proceeds to supplement the 2001 Bond Proceeds for the completion of the Carlos Ortega Villas Project. U. Pursuant to HSC Section 34177(1), the Successor Agency must prepare a Recognized Obligation Payment Schedule ("ROPS") for each six-month fiscal period ("ROPS Period"). The ROPS must be submitted to the Oversight Board of the Successor Agency (the "Oversight Board") and the State Department of Finance (the "DOF") for approval. V. Pursuant to HSC Section 34191.4(c)(2), the expenditure of 2001 Bond Proceeds for an obligation must be listed on a ROPS. W. Pursuant to HSC Section 34176(g), a designation of the use and commitment of the 2007 Housing Bond Proceeds must be listed on a ROPS. X. The Successor Agency has prepared and submitted to the Oversight Board and the DOF, a ROPS ("ROPS 13-14B") for the six-month fiscal period commencing January 1, 2014 (the "ROPS 13-14B Period"). The Carlos Ortega Villas Project is listed on ROPS 13-14B as Line Item No. 171 (being the portion expected to be funded from the 2001 Bond Proceeds) and Line Item No. 186 (being the portion expected to be funded from the 2007 Bond Proceeds). Y. As between the Successor Agency and the Housing Authority, the Housing Authority has better capacity (with respect to staffing and established procedures) to perform or cause to be performed, the work required to complete the Carlos Ortega Villas Project. Z. The Successor Agency and the Housing Authority desire to enter into this Agreement, to provide that the Housing Authority will perform or cause to be performed all work required to complete the Carlos Ortega Villas Project, with payment therefor to be made from the 2001 Bond Proceeds and 2007 Bond Proceeds. AA. Resolution No. adopted by the Oversight Board on , 2013 approving the Successor Agency's execution and delivery of this Agreement was approved [deemed approved] by the DOF pursuant to HSC Section 34179(h) on , 2013. NOW, THEREFORE, THE PARTIES DO HEREBY AGREE AS FOLLOWS: Section 1. Subject to the provisions of this Agreement and with the funding provided pursuant to this Agreement, the Housing Authority agrees to perform or cause to be performed all work required for the completion of the Carlos Ortega Villas Project, including but not limited to the preparation of designs, plans and specifications and all demolitions, construction -3- I2812.000I \ 1632318. I RES. NO. OB - 057 and installations. The Housing Authority shall perform such work in accordance with all applicable federal, state and local laws, rules and regulations. Subject to the covenants set forth herein, the Housing Authority shall have the sole discretion with respect to the design, planning, specification and the timing with respect to all components of the Carlos Ortega Villas Project. Section 2. (a) It is acknowledged that the Housing Authority is expected to advance cost for the Carlos Ortega Villas Project during the six month -period from July 1, 2013 through December 31, 2013 (the "ROPS 13-14A Advance"). As of October 10, 2013, the ROPS 13-14 Advance is expected to be $261,083. (b) On or before January 15, 2014, the Finance Director of the Housing Authority shall notify the Successor Agency of the actual dollar amount of the ROPS 13-14A Advance and the additional costs expected to be incurred for the Carlos Ortega Villas Project during the ROPS 13-14B Period (the "ROPS 13-14B Estimate"). Promptly after receipt of such notice from the Finance Director of the Housing Authority, subject to Section 2(c), the Successor Agency shall transfer to the Housing Authority an amount equal to the sum of the ROPS 13-14 Advance and the ROPS 13-14B Estimate. Such transfer shall be made from either the 2001 Bond Proceeds or the 2007 Bond Proceeds (or a combination thereof), as determined by the Finance Director of the Successor Agency. (c) Notwithstanding the foregoing Section 2(b), if the sum of the ROPS 13- 14A Advance and the ROPS 13-14B Estimate is greater than the sum of the dollar amounts approved by the DOF for ROPS 13-14B Line Item Nos. 171 and 186, then the Successor Agency's transfer pursuant to Section 2(b) shall be limited to such amounts approved for ROPS 13-14B Line Item Nos. 171 and 186. If any portion of the ROPS 13-14A Advance is not reimbursed to the Housing Authority during the ROPS 13-14B Period by operation of this Section 2(c), the Successor Agency shall include the unreimbursed portion of the ROPS 13- 14A Advance on the next ROPS (i.e., the ROPS covering the fiscal period from July 1, 2014 through December 31, 2014), with the funding source being the 2001 Bond Proceeds or the 2007 Bond Proceeds (or a combination thereof), as determined by the Finance Director of the Successor Agency. (d) Any cost for the Carlos Ortega Villas Project paid by the Housing Authority during ROPS 13-14B Period that is not reimbursed by the Successor Agency during the ROPS 13-14B Period shall be treated as a Housing Authority Advance (as defined in Section 3(b)). Section 3. (a) At any time, if the Housing Authority determines that the amount previously transferred by the Successor Agency pursuant to this Agreement is insufficient for the completion of the Carlos Ortega Villas Project, the Housing Authority's Finance Director shall notify the Successor Agency, specifying the estimated dollar amount necessary for the completion of the Carlos Ortega Villas Project (the "Additional Funding Amount"). To the extent that sufficient unspent 2001 Bond Proceeds or 2007 Bond Proceeds remain available, the Successor Agency shall list the Additional Funding Amount on the ROPS for the next available ROPS Period. Upon obtaining the Oversight Board's and the DOF's approval for such ROPS item(s), the Successor Agency shall transfer, or caused to be transferred, to the Housing Authority the Additional Funding Amount from the 2001 Bond Proceeds or the 2007 Bond -4- 12812.0001 \ 1632318. I RES. NO. OB - 057 Proceeds (or a combination thereof) as soon as practicable upon the commencement of the applicable ROPS Period. (b) Before the transfer of any Additional Funding Amount pursuant to Section 3(b) above, the Housing Authority may, but is not obligated to, advance funds from sources available to Housing Authority for the work necessary for the Carlos Ortega Villas Project (each such advance being a "Housing Authority Advance"). Any Additional Funding Amount transferred by the Successor Agency pursuant to Section 3(a) shall first be used to reimburse the Housing Authority for outstanding Housing Authority Advances, and then to pay for other expenditures of the Carlos Ortega Villas Project. Section 4. To the extent the Housing Authority still holds unspent 2001 Bond Proceeds or unspent 2007 Bond Proceeds transferred pursuant to this Agreement after the completion of the Carlos Ortega Villas Project (as determined by the legislative body of the Housing Authority), the Housing Authority shall return such unspent 2001 Bond Proceeds or 2007 Bond Proceeds to the Successor Agency within a reasonable time after such determination. Section 5. (a) The Housing Authority covenants that it shall use the 2001 Bond Proceeds in a manner consistent with the covenants in the 2001 Loan Agreement and the Certificate Regarding Arbitrage, Use of Proceeds and Related Matters, dated November 28, 2001, relating to the 2001 Bonds, but not limited to, any covenants regarding the tax-exempt status of interest on the 2007 Bonds under the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder. (b) The Housing Authority covenants that it shall use the 2007 Bond Proceeds in a manner consistent with the covenants in the Loan 2007 Agreement and the 2007 Tax Certificate, including, but not limited to, any covenants regarding the tax-exempt status of interest on the 2007 Bonds under the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder. Section 6. Each Party shall maintain books and records regarding its duties pursuant to this Agreement. Such books and records shall be available for inspection by the officers and agents of the other Party at all reasonable times. Section 7. The Parties agree to take all appropriate steps and execute any documents which may reasonably be necessary or convenient to implement the intent of this Agreement. Section 8. This Agreement may be amended from time to time by written instrument executed by both Parties. Section 9. No official, agent, or employee of the Successor Agency or the Housing Authority, or members of the governing board of the Housing Authority, or members of the Successor Agency Board of Directors or members of the Oversight Board shall be individually or personally liable for any payment hereunder in the event of any default or breach by the Successor Agency or the Housing Authority, or for any amount which may otherwise become due to the Housing Authority or Successor Agency, or successor thereto, or on any obligations under the terms of this Agreement. -5- 12812.0001\1632318.1 RES. NO. OB - 057 Section 10. This Agreement is made in the State of California under the Constitution and laws of the State of California, and is to be so construed. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURES TO FOLLOW] -6- 12812.0001 \ 1632318.1 RES. NO. OB - 057 IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized officers. SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY By JOHN WOHLMUTH, EXECUTIVE DIRECTOR ATTEST: RACHELLE D. KLASSEN, SECRETARY TO THE SUCCESSOR AGENCY OF THE PALM DESERT REDEVELOPMENT AGENCY PALM DESERT HOUSING AUTHORITY By JAN C. HARNIK, CHAIR ATTEST: RACHELLE D. KLASSEN, BOARD SECRETARY APPROVED: OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY By ROBERT A. SPIEGEL, CHAIR Date: -7- 12812.0001 \ 1632318.